Greener Ideas Changing Lives

Navigation

Category Archives: Africa

Post navigation

KOLKATA, JULY 28: Kolkata-based Dhunseri Petrochem & Tea Ltd has acquired two tea estates in the Republic of Malawi, a landlocked country in southeast Africa, at a consideration of Rs 122 crore ($22 million). Together the estates have a capacity to produce 9.5 million kg (mkg) of tea and 0.5 mkg of macadamia and coffee. Dhunseri currently produces 13.5 mkg of tea in India.

Following the acquisition, Dhunseri’s annual production is likely to be around 23 mkg, Mr C.K. Dhanuka, Chairman of the company, said. This incidentally, is its first acquisition overseas.

According to a notification by the company to the NSE, it has bought two tea estates in Africa — Makandi Tea & Coffee Estates Ltd and Kawalzi Estate Company Ltd — through its wholly owned subsidiary, Dhunseri Pertrochem & Tea Pte Ltd. The tea estates were acquired from London-based Global Tea & Commodities Ltd through a share purchase agreement. “We were previously looking for acquisitions in Kenya and Vietnam. However, we intend to keep plans on hold for another year or so. But if an opportunity comes midway we might take it up,” he said.

African nations like Zambia, Ethiopia and Mozambique invited Indian investors to invest in various sectors, especially in agriculture, saying this has the potential to provide food to both Africa and India.

Diplomats from the three countries showcased the immense potential and urged Indian investors to take advantage of the investor-friendly climate and a host of incentives they were offering.

They were addressing a session on “Doing business with African countries” organised by the Confederation of Indian Industry (CII) here Thursday.

The diplomats told the investors that by investing in their respective countries, they (the investors) can also reach out to markets in the entire Africa, Middle East and European Union.

With vast unutilised arable land, best agro-climatic conditions, a stable political system and investment incentives including 100 percent repatriation of profit, the African countries offer huge business opportunities to Indian investors, they said.

The diplomats said African nations were ideal destination for investment for Indian investors given the commonalities between India and Africa.

Susan Sikaneta, high commissioner of Zambia, said Indians with their good knowledge of agriculture, expertise and technology should come forward to invest in agriculture in Zambia, which is offering land and other incentives on first come, first served basis.

The central African country has 43 million hectares of land but only six million is being currently used.

“Chinese are coming in big numbers but we love Indians to come. You have passion for Africa. You are not like other countries which are interested only in making money,” she said advising investors not to miss the opportunity.

Eighty percent of Zambia’s 13 million population is dependent on agriculture. The investors can grow and export maize, cotton, wheat ando ther produce.

Maria Fatima G.C. Phume, deputy high commissioner of Mozambique, said only 15 percent of 36 million hectares of arable land in her country was utilised due to lack of agriculture technology.

She said Mozambique, which was one of the world’s fastest growing economies, offers excellent investment opportunities in agriculture,energy, mining and infrastructure.

“The investment in agriculture can not only secure food for our people but also for India. The investors can also export the agriculture produce to other African countries and Middle East,” she said.

With 23.4 million population, Mozambique has Portuguese as national language but English is widely used for business purposes

Jerusalem Amdemariam, minister counsellor, economic and business in the Ethiopian embassy, highlighted the investment incentives like 100 percent exemption from import duties. The investors are allowed to repatriate the entire profit. Agro-processing industries are also exempted from income tax for two to seven years

With 82 million population, Ethiopia is the second most populous African country after Nigeria and with its proximity to Middle East and Europe, offers access to big markets.

She said Indian government was collaborating in road developments and laying new railway lines. Ethiopia offers tremendous business opportunities in agriculture, manufacturing particularly agro-processing,food and beverages, she added.

I.Y.R Krishna Rao, Andhra Pradesh’s special chief secretary, cooperation and agri-marketing, said a delegation headed by state agriculture minister would soon visit Africa to explore investment opportunities in agriculture and allied sectors.

“We should really build up mutually beneficial relationship in agriculture which has tremendous implications in terms of food security in India and as well as Africa,” he said.

Rao said once African agriculture develops, it can to a large extent ensure food security of the world. “As a continent, in terms of agriculture, there is a lot of scope for development there,” he said.

Suchitra K. Ella, chairperson, CII-Andhra Pradesh, said there was tremendous scope for cooperation between India and the three African countries given their historic relationship and the commonalities.

Zambia, a peaceful and democratic African nation, is inviting Indian investment in all sectors of its vibrant economy, especially in agriculture, mining, tourism, ICT, energy, Education, manufacturing, energy and infrastructure development. Indian investment in Zambia has been mainly in areas of mining, energy and banking.

Zambia, which has embarked on an economic reform and private investment promotion process, is inviting investment in the other vastly untapped areas, especially agriculture, horticulture and agro-processing and wild life tourism, with potential for development of wildlife estates.

Leading a 21-member business delegation from Zambia with representatives from the government, industry, trade and SMEs, Mr Steven Mwansa, Permanent Secretary, Zambia Ministry of Commerce, Trade and Industry, said here on Monday that, “Zambia also welcomes an opportunity to enhance its trade, investment and warm bilateral relations with India’’.

In an exclusive interaction and B2B meeting with Zambia investment and trade delegation, organized by the Confederation of Indian Industry (CII), he said India is one of the key sources of foreign direct investment in Zambia.

The main investors are Vedanta Resources, Tata Africa Holdings, Kalpataru Power, Bharat Heavy Electricals, Exim Bank of India with a 34% share in the Development Bank of Zambia besides the presence of Bank of India, Bank of Baroda and Central Bank as equity partners with other Banks in Zambia.

Zambia has a stable and growing economy and market. It has been ranked among the top ten best reformers in Africa by the World Bank Survey of 2011, and has got a B+ credit rating by Standard & Poor, making it a good investment destination, Mr Mwansa said.

With its Private sector Reform Development Programme (PSRDP) and through ZDA, Zambia has created an Investment-friendly environment streamlining business licensing and administrative process related to business establishment.

The expected establishment of a single Free Trade Area(FTA) comprising 26 countries of Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and South African Development Community (SADC) by 2012, would create a larger market “that will be attractive to investments and conducive to large-scale production’’.

Mr J N Amrolia, Chairman, CII Southern Region International Networking Forum and Director, Ashok Leyland John Deere Construction Equipment Company Pvt Ltd, said Zambia was a good investment destination and the country should be very high on the radar of Indian investment explorations.

The Tata group revealed plans to grow tea in Ethiopia. The corporation has expressed interest in tea farming in Ethiopia said Esayas Kebede Director of the Ethiopian Ministry of Agriculture and Rural Development.

The Ethiopian authorities are in dialogue with Tata according to Esayas. Tata, owner of ‘Tetley’ tea brand, has ventured a proposal he added. Ethiopia has land suitable for tea cultivation according to Esayas.

Favorable land and labor costs area available to Indian companies wishing to invest in the agriculture industry Esayas explained. Bilateral trade between India and Africa have increase significantly and in Ethiopia, approximately 70% of 40,000 hectares designated for contract farming has gone to Indian companies, he added.

Increasing its investment presence in the African continent is a wise decision for Tata, The expansion allows it to take advantage of newly created opportunities and helps cut down custom and excise on imported goods according to regional sources.

Tata Africa Holdings (SA) Pty Ltd has a presence in 10 countries of the continent in sectors as varied as information technology, communications, automobiles, steel, hospitality, consumer products and chemicals.

Ethiopia, a landlocked country located in the horn of Africa, is readying over 3 million hectare of land for investors to develop large-scale commercial farms, according to a government official.

“We have developed 3.6 million hectare from the National Land Bank to attract foreign direct investments. Of this, we have already allotted 400,000 hectare, with 70 per cent being to Indian investors. The remaining three million-odd hectare is now available for local and foreign investors,” said Esayas Kebede, director, ministry of agriculture and rural development, Ethiopia.

He was speaking to Business Standard at the India-Africa Business Partnership Summit, a two-day event focused on bilateral trade between the two countries organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) here recently.

Ethiopia, which has privatised cultivation of cotton, palm oil, rubber and sugarcane, the identified investment priority areas, had so far seen investments to the tune of $6 billion from India. Over 9,200 investors had received licences for developing large-scale commercial farms in Ethiopia since 1996, out of which around 1,300 are foreign.

“There are also huge investment opportunities in the areas of agro processing, horticulture and floriculture, dairy, meat and leather products. The leasing rates are rational. What we are looking for is rich investors from India, China and other countries, who can contribute to the social development of Ethiopia and help reduce food insecurity,” Kebede said.

The leasing period depends on the crop. For annual crops, the lease period would be up to 20-25 years, while it would be up to 35-40 years for perennial crops, with the minimum investment to take land on lease being $100,000, he added.

Kebede said that the Ethiopian government had a clear policy, specially on the incentives side. Investors are facilitated with a seven-year tax holiday. They are also allowed to repatriate 100 per cent of their earnings to any country out of Ethiopia.

Brushing aside reports on forcible relocation of locals and poor wages to those working on the new farmlands, he said, “We are expanding large-scale farming only in areas where we have sufficient arable land without depriving local farmers of their livelihood. Around 3 million people here are expected to require foreign food assistance this year. We expect our commercial farming initiatives to solve this food shortage.”

Karuturi Global, the city-based publicly-held floriculture major and one of the world’s largest exporter of roses which is aggressively rolling out an agriculture business venture in Ethiopia, is looking at outsourcing 20,000 hectares of farm land in the African nation to Indian farmers on a revenue-sharing basis.

The company has leased 300,000 hectares in Gambela, in the western corner of Ethiopia. It has been looking to develop a bouquet of crops such as paddy, maize, cereals, palm oil, and sugarcane, among others, to cater to the huge demand in Africa and also look at the export market. According to senior officials of Karuturi, they have taken possession of 100,000 hectares, and after the completion of this, they will be able to take possession of another 200,000 hectares.

“We have got a decent response. We intend to give land and the necessary infrastructure to farmers who have the expertise in specific crop cultivation and get into a revenue share (65:35) with them. We hope to have agreements reached for around 20,000 hectares in the near future as part of the first phase,” a senior company official told Business Standard.

The first phase will be over by the end of this financial year. As part of its expansion plans in this sector, Karuturi had earlier this year held discussions with farmers from Punjab interested in this venture.

For the second phase, Karuturi is understood to have initiated discussions with some farmers in South India and a few agri-commodity majors. It hopes to outsource as much as 50,000 hectares over a period of time.

Karuturi Global, which reported a topline of close to Rs 700 crore during last financial year, derives as much as 90 per cent of its revenues from the floriculture business. The company hopes to get 35 per cent of its revenues from the agriculture business in the next couple of years.

The company had recently taken a hit of around $15 million after flash floods in Ethiopia destroyed maize crop sown over 12,000 hectares. To prevent such setback, Karuturi has hired WAPCOS limited, a public sector enterprise, to provide consultancy services for undertaking flood control measures besides designing irrigation and drainage systems.

WaterWatch, a Dutch advisory firm, has also been in engaged in authenticating the irrigation, drainage and flood control work of Karuturi.

Tanzania is looking for more investors into sugar production so as to meet domestic demand for the commodity as well as generate a surplus for export.

Revelian Ngaiza, Acting Head of Private Sector Development Unit, in the Ministry of Agriculture, Food Security said this during the recent India Agribusiness forum hosted by Tanzania Chamber of Commerce, Industry and Agriculture, Tanzania Investment Center and Agriculture Council of Tanzania.

Tanzania is now looking for more investors into the said sector because demand is still high. “The sugarcane farming and processing capacity in Tanzania is very small and cannot meet the country’s annual demand for sugar.

“We invited the Indian investors to invest in sugarcane farming because Tanzania is endowed with an area of 94.5 million hectares of arable land of which 44 million are classified as suitable for agriculture,” he said

Apart from that Tanzania is also blessed with enormous water resources potential constituting rivers, lakes, and underground water sources for irrigation and other uses.

Apart from increasing the supply of sugar in the market and stabilising prices, the investment would create employment, as well as help the government in its efforts to implement Kilimo Kwanza Initiatives, he said.

Most sugarcane is grown in estates, owned by the processing factories as well as contract growers.

Despite major sugarcane estates in Morogoro, Kilombero Sugar Company and Mtibwa Sugar Estates as well as the Kagera Sugarcane Estates, the demand is higher than supply, with the gap filled by importation.

The major factors behind reduction in sugar production are the small plants engaged in production, drought coupled with poor irrigation infrastructures in the sugar estates, noted Ngaiza.

Tanzania’s sugar consumption stands at 480,000 tonnes per annum, but the four factories, namely the Tanganyika Plantation Company (TPC), Kilombero, Kagera and Mtibwa Sugar produce only 320,000 tonnes.

Last year, Tanzania’s sugar demand was more than 330,000 tonnes, while its production stood at 250,000 tonnes, creating a deficit of nearly 80,000 tonnes. The retail cost of sugar has risen to 2,500/= from 1,700/- per kilo in retail outlets.

Following shortage of the sweetener in the other East African Community partner states, sugar is smuggled there where it fetches higher prices.

The situation has led to shortage of item in the country, which many analysts say is behind the spiralling of the item’s wholesale, sub-wholesale and retail prices.

Kenya and Uganda are known to be facing an acute shortage of sugar that has prompted the smuggling of the sweetener from Tanzania, where the price is lower.

Cases of smuggling have been reported at various posts on Tanzania’s borders with her two neighbours, leading to sporadic price rises in the country.

While retailers in Tanzania are directed to sell a kilo of sugar at not more than 1,700/-, the current sub-whole price stands at between 87,000/- and 11,000/- per 50-kilo bag and the retail price at between 2,300/- and 2,500/- a kilo.

In Kenya a kilo of the item fetches Kshs 210, which at the current exchange rate is 3,570/-. In Uganda it is Ugsh. 6,000 (equivalent to 3,400/-) and in Burundi it is Burundi Franc 2000 (about to 3,100/-).

Reports received earlier this week gave Tarime District in Mara Region as the most notorious for sugar smuggling to Kenya, mainly through Sirari, Kubiterere, Kogaja and Borega.

Media reports from Kenya have it that sugar has become scarce after the closure of that country’s key sugar producing factories for mandatory annual maintenance.

The country now produces only two-thirds of its demand and imports the remaining one third.

From Uganda, it is reported on authority that the past three weeks have seen sugar prices shoot up to as high as Ush7,000 per kilo, making it difficult for the average shopper to access it.

Rationing has been introduced, restricting shoppers from buying more than two kilogrammes of the item, apparently to fight racketeers who were buying cheap from supermarkets and wholesalers and selling expensively to shoppers.

ADDIS ABABA: Ethiopia has been described as a land of investment opportunities and alternatives for foreign investors wishing to engage in the agriculture sector by a visiting Indian Agriculture and Commerce delegation.

During discussions between the 34-member delegation with members of the Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) here Tuesday, its leader, Ramakrishna Karuturi, said a good number of Indian investors had engaged in various investment sectors in Ethiopia in view of the availability of favorable conditions for investment in the country.

Karuturi, who is also the founder and Managing Director of Karuturi Global Limited, the world’s largest rose grower, said Ethiopia attracted investors as it was a country endowed with untapped natural resources.

With about 5.5 million hectares of arable land, fertile soils and plenty of rainfall, Uganda still suffers the brunt of famine despite the country’s agriculture potential. However, over the years, the sector has increasingly drawn attention from foreign investors, keen to plough money into the trade.

Last week, Uganda received a 35 man business delegation from India interested in the country’s agribusiness potential and boosting its exploits. Mr Ramakrishna Karuturi, the leader of the delegation, said the team intends to invest up to $2 billion in agribusiness pending the issue of investment licences.

The team is keen on mechanised commercial farming, fertiliser and pesticide manufacturing, agro-processing, agriculture equipment importation, finance and information and communication technology.
Agriculture Minister Tress Bucyanayandi said increased investment in agriculture will boost food production, reduce high food prices and ensure food security in the region.

He said the delegation should also consider investing in financial institutions that are dedicated to financing agricultural projects as commercial banks shun funding the sector due to risks involved.
“Most commercial banks shy away from financing agriculture, which hinders agricultural value addition,” he said in Entebbe last week.

Agriculture is Uganda’s dominant sector, employing over 70 per cent of the country’s population and accounts for about 48 per cent of the country’s exports. Mr Bucyanayandi also noted that the government is contemplating eliminating middlemen from the agricultural value chain, a reform that seeks to boost farmers’ household incomes.

No exploitation
Farmers will be organised into farmer and marketing groups and cooperatives to increase their bargaining power for higher payments and stop middlemen exploitation. “Middlemen pay them very little money yet they over charge the final consumers. So this needs to be implemented with immediate effect,” he said.

Uganda Investment Authority director for investment promotions Issa Mukasa told the prospective India-Uganda agribusiness meeting on Friday that they should also consider investing in hides and skins value addition and dairy farming and processing since they are also still under-exploited.

In June, Nitol-Niloy Group of Bangladesh commenced negotiations with the Ugandan government to invest about $12.5 million to lease approximately 10,000 hectares of land to be used for agricultural production.